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Pakistan Cotton Ginners Association (PCGA) Chairman, Abdul Rasheed Khan has rejected the proposal of ban on the export of raw cotton and cotton yarn, urging the government to let the import and export of the commodity on free market mechanism.
In his letter to President, Asif Ali Zardari, Prime Minister Syed Yousuf Raza Gilani, Federal Finance Minister Shaukat Tarin, Federal Minister for Food & Agriculture Nazar Muhammad Gondal and Federal Minister for Textile, Rana Farooq Saeed Khan seeking their immediate intervention for continuation of export of cotton and cotton yarn.
Abdul Rasheed Khan strongly condemned the proposal of imposing any duty restriction on the export of cotton and yarn, which would be a suicidal act against the economy. He said in his letter that textile industry is working since last 14 years on the free market mechanism wherein cotton is freely importable and exportable.
Textile spinning industry is short of 3.5 million bales over the consumption and it had to meet the shortage through import of cotton whereas over 5 hundred thousand bales of cotton has already been exported. The spinning industry is paying export parity price of cotton to the farmers.
In the interest of farmers, the industry will not suggest that cotton export should also be banned. Similarly, there is shortage of Polyester Staple Fibre due to closure of PSF manufacturers have further raised PSF prices, which is the major cause of rise in yarn price for power looms sector. Almost 100 percent powerlooms sectors consume blended yarn for making fabric for bedwears. Current increase in yarn exports has been made from the carry over stocks by the industry.
The government should immediately take measures to revive 25 percent closed/sick capacity to improve yarn availability. The availability of yarn for the local consumption can be improved by introducing; Immediate implementation of 1 percent duty drawback to the sale of yarn and fabric to export houses.
The government should immediately allow drawback to all domestic sales of yarn and fabric through Standard Purchase Orders (SPOs) on 1 percent duty drawback basis. Export re-finance facility on deemed export basis be extended to the manufacturers of yarn selling in domestic market under SPOs.
Rasheed Khan said that a particular lobby was demanding imposition of regulatory duty or imposing ban on the export of cotton and cotton yarn, which is contrary to the free trade mechanism and it would hit hard the trade of Pakistan with different countries. He said that Ginners would have to suffer financial loss and they would not be able to clear the dues of the farmers and sowing of wheat and other crops would be affected. He claimed that Pakistan was earning maximum foreign exchange through cotton and cotton yarn exports when the world was facing recession and financial stress.

Copyright Business Recorder, 2010

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